IncrediMail Ltd. (NASDAQ: MAIL) (www.incredimail-corp.com), an
Internet company, today reported financial results for the first
quarter ended March 31, 2009.
Total revenue for the first quarter of 2009 rose $1.6 million,
or 34%, to $6.4 million, from $4.8 million in the same quarter in
2008. Net income for the first quarter of 2009 was $1.4 million, or
$0.15 per diluted share, compared to a net loss of $0.7 million, or
($0.07) per diluted share from the same period last year. Non-GAAP
net income in the first quarter of 2009 increased more than
three-fold, reaching $1.6 million, or $0.18 per diluted share,
compared to $0.5 million, or $0.05 per diluted share, from the same
period last year.
Commenting on the results, Mr. Ofer Adler, IncrediMail�s CEO,
said, �We succeeded in growing our revenues by over 30% this
quarter. Although traditionally lower than the fourth quarter, the
first quarter saw record revenue as we realized the full benefit of
our refocused business activities from initiatives that we put into
place in 2008. In particular, our search initiatives generated the
overall increase in revenue in the first quarter.
�Additionally, our streamlining activities that also commenced
in 2008, helped to produce EBITDA of $2.7 million, operating income
of $2.5 million, or 39% of sales, and record net income of $1.4
million. We were able to achieve all this despite a $0.4 million
finance expenses and a higher tax rate related to our recently
instituted dividend policy.
�No company is recession proof, and IncrediMail is also
experiencing downward pressure because of the negative economic
climate. This was felt in product sales and CPC rates in our search
related revenues as advertisers spent less, and consumers reduced
their purchases during these poor economic times. This climate
continues to present challenges not only to IncrediMail, but to a
substantial number of businesses around the world.
�Nonetheless, even in this challenging environment, we were
encouraged by our strong first quarter and we continue to believe
that we will be able to attain $25 million in revenues during 2009.
We believe this is achievable through volume: increased queries
offsetting the decrease in the average revenue per query. Moreover,
we believe that given our current cost structure, we can increase
our guidance for operating income to $7 million in 2009. As for net
income, we cannot pinpoint a number as this metric is impacted by
various items including, among other things, financial income and
expenses, exchange rate fluctuations, as well as our effective tax
rate, which is affected by our dividend policy and its
implementation.�
Gross profit increased 39% to $6.0 million in the first quarter
of 2009, from $4.3 million reported the first quarter last year.
This increase was due to the increase in revenues and an increase
in gross profit margin to 94% from 91% in the first quarter of
2008. The increased profitability was due to the growing portion of
revenues attributable to search, which accounted for over 70% of
revenues and have no direct costs associated with them.
Total operating expenses for the first quarter of 2009 were $3.5
million, down $1.7 million, or 32%, compared to $5.2 million in the
first quarter last year. More than half of this decrease was from
the reduction of ongoing operating expenses, while the remaining
reduction was attributable to other one time charges in the first
quarter of 2008.
R&D expense decreased 34%, to $1.4 million in the first
quarter of 2009 from $2.0 million in the same quarter last year.
The decrease was primarily a result of focusing development efforts
on IncrediMail�s current suite of products and the search business
model. Within a few months, the Company expects to release a
completely new version of its email product that is feature rich
with advanced functions. In addition, IncrediMail expects to
release new versions of its HiYo instant messaging tool, tailoring
it to more platforms, during this year as well.
Sales and Marketing expenses were $1.2 million in the first
quarter of 2009, similar to those in the first quarter of 2008.
This reflects the Company�s continued effort to broaden its market
and user base, having invested $0.5 million in customer acquisition
expenses in the first quarter of this year compared to $0.3 million
in the first quarter of last year.
As a result of the above, Operating Income in the first quarter
of 2009 was $2.5 million, or 39% of sales, compared to an operating
loss of $0.9 million in the first quarter of last year. The
effective tax rate for the first quarter of 2009 increased to 31%
mainly due to the newly instituted dividend policy.
Net income for the first quarter of 2009 was $1.4 million or
$0.15 per diluted share, compared to a net loss of $0.7 million, or
$(0.07) per diluted share in the first quarter of 2008.
�This has been a fantastic quarter and really reflects the
efforts that we have invested throughout 2008 to increase our
search generated revenue base as well as streamline our operations.
Although our business is seasonal with the second and third quarter
being slower than the first and fourth quarters, we continue to
expect positive results during 2009, and to maintain our revenue
growth, as well as manage our costs,� concluded Mr. Ofer Adler.
Conference Call
IncrediMail will host a conference call to discuss the results
today, May 4th at 9:30 AM EDT (16:30 PM Israel Time). We invite all
those interested in participating in the call to dial
1-(888)-723-3163. Callers from Israel may access the call by
dialing (03) 918-0650. Participants may also access a live webcast
of the conference call through the Investor Relations section of
IncrediMail's website at www.incredimail-corp.com. The webcast will
be archived on the company�s website for seven days.
About IncrediMail Ltd.
IncrediMail Ltd. (NASDAQ: MAIL) is an internet company that
develops customized, downloadable graphic consumer applications
used to generate search related revenues and designs, markets and
delivers high end personal desktop software. The company�s award
winning e-mail client product, IncrediMail Premium, is sold in over
100 countries in 10 different languages. Other products include,
HiYo a graphic add-on to instant messaging software, Magentic, a
wallpaper and screensaver software, and PhotoJoy, software for
presenting digital personal photos.
Non-GAAP measures
Use of Non-GAAP Financial Information - In addition to reporting
financial results in accordance with generally accepted accounting
principles, or GAAP, IncrediMail uses non-GAAP measures of net
income and earnings per share, which are adjustments from results
based on GAAP to exclude reorganization expenses and non-cash
stock-based compensation expenses. IncrediMail also uses EBITDA as
a non-GAAP financial performance measurement. EBITDA is calculated
by adding back to net income; interest, taxes, depreciation and
amortization. IncrediMail's management believes the non-GAAP
financial information provided in this release is useful to
investors' understanding and assessment of IncrediMail�s on-going
core operations and prospects for the future. The presentation of
this non-GAAP financial information is not intended to be
considered in isolation or as a substitute for results prepared in
accordance with GAAP. Management uses both GAAP and non-GAAP
information as presented in this press release in evaluating and
operating business internally and as such deemed it important to
provide all this information to investors. These non-GAAP financial
measures may differ materially from the non-GAAP financial measures
used by other companies. Reconciliation between results on a GAAP
and non-GAAP basis is provided in tables immediately following
IncrediMail's Statement of Operations in this press release.
Forward Looking Statements
This press release contains historical information and
forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995 with respect to the
business, financial condition and results of operations of the
Company. The words �believe,� �expect,� �intend,� �plan,� �should�
and similar expressions are intended to identify forward-looking
statements. Such statements reflect the current views, assumptions
and expectations of the Company with respect to future events and
are subject to risks and uncertainties. Many factors could cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements, including, among others, changes in the
markets in which the Company operates and in general economic and
business conditions, loss of key customers and unpredictable sales
cycles, competitive pressures, market acceptance of new products,
inability to meet efficiency and cost reduction objectives, changes
in business strategy and various other factors, both referenced and
not referenced in this press release. Various risks and
uncertainties may affect the Company and its results of operations,
as described in reports filed by the Company with the Securities
and Exchange Commission from time to time. The Company does not
assume any obligation to update these forward-looking
statements.
�
INCREDIMAIL LTD.CONDENSED BALANCE
SHEETS
U.S. dollars in thousands (except
share data)
� �
March 31,
�
December 31,
2009 2008 ASSETS
Unaudited CURRENT ASSETS:
Cash and cash equivalents $ 5,612 $ 7,835 Short-term bank deposits
944 -- Marketable securities 21,043 18,790 Trade receivables 2,350
2,194 Deferred taxes 263 362 Other receivables and prepaid expenses
� 4,716 � 4,941 Total current assets � 34,928 � 34,122 LONG-TERM
ASSETS: Severance pay fund 874 955 Deferred taxes 344 328 Other
long-term assets 443 619 Property and equipment, net 1,382 1,478
Other intangible assets, net � 134 � 149 Total long-term assets �
3,177 � 3,529 Total assets $ 38,105 $ 37,651 � LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 1,131 $
1,948 Deferred revenues 2,549 2,605 Accrued expenses and other
liabilities � 4,333 � 4,426 Total current liabilities � 8,013 �
8,979 LONG-TERM LIABILITIES: Deferred revenues 1,743 1,743 Accrued
severance pay � 1,303 � 1,385 Total long-term liabilities � 3,046 �
3,128 � SHAREHOLDERS' EQUITY
Shares issued and outstanding:
9,240,904 and 9,271,159 at March 31, 2009 and December 31, 2008,
respectively
� 27,046 � 25,544 Total liabilities and shareholders' equity $
38,105 $ 37,651 �
INCREDIMAIL LTD.CONDENSED
STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except
per share data), unaudited
�
�
�
Quarter ended March 31, 2009 �
2008 Revenues
$ 6,376 $ 4,763 Cost of revenues � 387 � � 451 � Gross profit �
5,989 � � 4,312 � Operating expenses: Research and development
1,358 2,047 Selling and marketing 1,169 1,242 General and
administrative 999 1,153 Other one time charges � -- � � 745 �
Total operating expenses � 3,526 � � 5,187 � Operating income
(loss) 2,463 (875 ) Financial income (expense), net � (398 ) � 142
� Income (loss) before taxes on income 2,065 (733 ) Taxes on income
(tax benefit) � 642 � � (57 ) Net income (loss) $ 1,423 � $ (676 )
� Net earnings (loss) per Ordinary share: Basic $ 0.15 � $ (0.07 )
Diluted $ 0.15 � $ (0.07 ) Diluted weighted number of shares (in
thousands) � 9,274 � � 9,476 � RECONCILIATION OF GAAP TO NON-GAAP
RESULTS: GAAP Net income (loss) $ 1,423 $ (676 )
Other one time charges
-- 745 Stock based compensation � 220 � � 381 � Non-GAAP net income
$ 1,643 � $ 450 � Non-GAAP net earnings per share : Basic $ 0.18 �
$ 0.05 � Diluted $ 0.18 � $ 0.05 � GAAP net income: $ 1,423 $ (676
) Income tax expense (tax benefit) 642 (57 ) Interest income
(expense), net (398 ) 142 Depreciation expense 163 163 Amortization
expense � 24 � � 18 � EBITDA $ 2,650 � $ (694 )
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